How can a good sales metric create expensive work?
A sales metric creates operational risk when people can satisfy it before the business has established what it is promising. The gap may appear as revisions, unpaid work, or slower delivery. Start by checking which promises were made, when they became commitments, and who had the information to question them.
Consider an illustrative architecture studio tracking the time from inquiry to signed proposal. A principal commits to an aggressive date before anyone confirms how many tenant approvals are needed. The proposal goes out fast. The project lead later discovers that two outside reviewers can each require another submission. The principal got a signature. The team inherited a schedule nobody had tested.
The same fast turnaround can be entirely appropriate for a repeat client with a familiar scope. The useful distinction is which promises can safely be made early.
How do you test whether the target is part of the problem?
Compare similar jobs across periods or teams and reconstruct the decision at the time. Ask how the target affected what was promised and when. Check other plausible explanations, such as different project complexity or changes in staffing. The target is a hypothesis until the behavior and downstream effect can be traced.
Pull the proposals alongside the first scope revisions and time entries. On each job, record what the client was told, what the studio knew, and what was discovered later. An undocumented approval dependency is a different problem from a dependency the principal knew about and felt pressure to omit.
What should a CEO review alongside the KPI?
Keep proposal turnaround visible and add one measure that captures the downstream cost, such as unplanned revision hours linked to scope assumptions. Agree what counts, who records it, and what change in either measure triggers review. Keep the comparison tied to the same jobs.
A one-page record can hold five fields: local target, action rewarded, downstream cost, alternative explanation, and paired measure. Bring one job where the target worked as intended and one where it may have created a problem. Discuss what the business wants people to do in each situation.
FAQ
Do we need to replace every departmental metric?
Review the ones tied to recurring friction between teams. Many local metrics are useful when there is a shared definition of success and the cost of meeting the target is visible.
Should sales be held accountable for delivery problems?
Give people accountability for decisions they can influence. A proposal owner can document commitments and seek review. Delivery still owns the decisions within its control.
What if there is no clean data?
Start with a few jobs and inspect the underlying records together. Keep the conclusion provisional and track comparable cases prospectively.
Sources
- Donella Meadows, Leverage Points, for how goals and rules shape a system.
- John Sterman, System Dynamics Modeling, for how responses to well-intended policies can undermine their purpose.